FORTUNE — The Blackstone Group (BX) is ending its pursuit of Dell Inc. (DELL) without formally submitting a superior offer to the $24.4 billion bid made earlier this year by company founder Michael Dell and private equity firm Silver Lake Partners.
The Wall Street Journal first reported the news earlier this evening, and it has been independently confirmed with multiple sources by Fortune. We also have learned that Blackstone plans to formally advise Dell’s special committee of its decision later tonight via letter.
This means that Michael Dell and Silver Lake clearly are in pole position, although Carl Icahn remains a wildcard in the outside lane. No other bidders emerged during a “go-shop” period that expired last month.
Blackstone was an odd suitor for Dell from the start, given its lack of a successful track record in the technology space. In fact, Michael Dell didn’t even approach the firm last summer when he was seeking deep-pocketed private equity partners for his takeover attempt.
The only real connection was in the form of David Johnson, Dell’s chief deal-maker until he joined Blackstone this past January. It was never really clear if he left Dell on good or bad terms, nor if he held enough sway yet inside of Blackstone to pull off what would have been the firm’s largest buyout since Hilton Hotels in 2007.
Earlier today I asked Blackstone president Tony James about the firm’s commitment to technology deals, to which he responded enthusiastically. At the same time, however, the firm’s current tech deal team remains light on relevant experience.
No specific word yet on why Blackstone bailed, although Dell’s recent earnings and broader PC sector spiral couldn’t have helped matters. There also were broad questions as to how Blackstone would successfully finance the deal. Not only because its public equity “stub” may not have been large enough to fill the hole left by Michael Dell’s shares, but also because it would have to sell bankers on a new management team. Plus, Microsoft (MSNBC) has committed a $2 billion loan to the Silver Lake deal which is not necessarily fungible.
A Blackstone spokesman declined to comment. Fortune also has reached out to Dell’s special committee for comment, and will update this post if it is forthcoming.
Dell shares today closed trading at 13.95 per share, or more than 2% higher than Silver Lake’s $13.65 per share offer. Several of Dell’s largest outside shareholders, including Southeastern Asset Management and T. Rowe Price, have said they’ll vote against such an offer.
UPDATE: Dell’s special committee just released the letter received from Blackstone. Here it is:
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